Energy services are essential to every household in Victoria. We must purchase these services to remain physically healthy, mentally well and to enable us to function in society. Electricity and gas debt and disconnection issues have always been amongst the top issues reported to Consumer Action’s National Debt Helpline (NDH).

This report analyses unique data from 1867 file system records. These file records were made based on individual calls to NDH where services were provided. Out of this sample of almost 2,000 calls, an average of 14 per cent of these calls were energy related.

This report provides insights on the impact of regulation and policy reform implemented by the Victorian Government in relation to energy issues reported by callers to NDH. It is the result of reviewing a sample of NDH call notes since July 2017 to reveal trends.

Key findings:

• Energy disconnections have significantly reduced following the implementation of the Victorian Government’s Payment Difficulty Framework from 1 January 2019. The Payment Difficulty Framework was a major reform to energy regulation in Victoria. It created new requirements for energy retailers to assist people when they have difficulty paying a bill. Since the policy was implemented, zero disconnections have shown up in our sample of calls to the National Debt Helpline. Our data also shows that there has been a reduction in people with very large bills contacting our service and less inappropriate referrals since the new requirements were introduced. This does not demonstrate causation but is nevertheless a positive result.
• Energy Companies are still failing to comply with some aspects of the Payment Difficulty Framework. There are still examples of poor practices and the Essential Services Commission must take compliance and enforcement action to hold energy companies accountable and protect Victorians who are most at risk of losing access to essential energy services.
• Early intervention is important because energy debts can spiral out of control. Energy debts are the ‘canary in the coalmine’ for financial hardship and they lead to other debts when not adequately addressed with early intervention. Energy retailers have a social responsibility as essential service providers to assist people who are unable to pay their energy bills. This is formalised in the Payment Difficulty Framework.
• There is a strong relationship between receiving a Centrelink income and issues with energy debt. If the Federal Government was to raise the single rate of Newstart, Youth Allowance and other related payments by at least $75 a week, it is likely that the number of people struggling to pay their energy bills would decrease.